On Friday 31st March we were privileged to be given a preview of the innovative method of procurement called Integrated Project Insurance (IPI) by Dr Mike Murray (pictured above), a member of the Alliance Board for Dudley College’s construction skills facility “Advance II”.
In April 1999, Mike presented a paper at the seventh Edge Debate “Constructive Feedback: What can Insurance offer Best Practice” at the Institution of Civil Engineers. Mike’s paper ‘Effective feedback – is insurance the greatest barrier?’ explored the frustration of insuring the integrated design and construction that his company IDC Stratford was doing for Big Pharma with much bigger premiums than for design or construction separately, when there should have been less risk, not more.
Following the Latham Report (1994) there was a small flurry of Partnering arrangements and following Egan (1998) the PPC2000 partnering contract was devised. But for most of us the obvious sense of integrating design and construction remains a dream, bogged down in badly advised risk dumping contracts leading to frequent conflicts, at huge cost to the client and to the industry; the only beneficiaries being the lawyers and the insurers, why would they advise us to change? As architects our Professional Indemnity Insurers forbid us from discussing let alone admitting our mistakes, thereby precluding a proper process of continuous improvement; in contrast we had heard at that Edge Debate, how the Aviation industry has an obligation to own up to mistakes, on a blame-free basis because the risks of not doing so are so great.
Now after a long gestation period we were hearing about the Outline Business Case for Advance II, part developed by Mike Murray, which included Integrated Project Insurance project in response to Dudley College’s frustrations with conventional procurement practices – surely there must be a better way? Given the dysfunctional procurement systems we regularly practice, Mike started by asking IPInitiatives question: “What solutions we might come up with to”:
- get your message to the whole team at the same time - once
- procure the exact team of specialists required to produce the product you need at the beginning
- run the project as a business with all parties having a vested interest in the best outcome
- pay everyone at the same time for everything they do on the project
- design and deliver everything once only
- achieve commercial certainty – Manage project by managing risks as a whole team
- use BIM and create a CDE to manage design solutions and information
- ensure you have a team that is truly collaborative
Quite a good list! But I know from my engagement on the Board of the Movement for Innovation (1998-2002) just how difficult it is to persuade people to change the way they do things, even when they understand the logic.
Working this out from first principles was hard work and needed plenty of support from IPI Initiatives Ltd. One really radical aspect was the establishment of a Project Board that included the client, the architect, the civil/structural engineers, the building services contractor and the contractor all as equal partners. The parties were chosen for their ability to achieve rather than on price and are incentivised by a pain/gain share mechanism within a no-blame culture. Working with Fulcro, Mike actsas Project Coordinator (and strategic MEP adviser) and responded to his challenges:
- A one multiparty Contract
- Invite whole supply chain to party
- Virtual business – board of experts
- PBA – open book – pay for people and buy things separately
- Don’t start design till fundamentals of the solution agreed
- Appoint independent experts as part of the process
- Ensure all team have input and buy in from day 1
- Choose the team for their ability and measure their behaviours; monitor and mentor ongoing
Dudley College IPI was not a breeze but it got insurance including Cost Overrun Insurance and it is nearly finished. Reading University has been monitoring the project so there will be much to learn from it. Personally I cannot wait to get involved in the next IPI project; Cullinan Studio has the skills and the culture, so are any clients out there who want to try it?